SANDYPORT HOMEOWNERS ASSOCIATION LIMITED NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2021 (CONTINUED)

(Expressed in Bahamian dollars)

5.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

e. Fixed assets and right-of-use asset - Fixed assets and right-of-use asset are stated at cost less accumulated depreciation and any impairment losses. Historical cost includes expenditures that is directly attributable to the acquisition of the items. Right-of-use asset is stated at present value of lease payments and is presented with fixed assets in the statement of financial position. Depreciation is calculated on the straight-line basis to write-off assets over their estimated useful lives as follows:

3 - 5 years

3 years

3 years

3 years

Waste water systemMaintenance equipmentComputer and office equipmentSecurity equipmentRight-of-use asset - 10 years f. Income and expense recognition - Income and expenses are recorded on an accrual basis of accounting. g. Improvements - These are various projects that are undertaken for the improvement of common areas. These projects are additions and modifications to existing infrastructure within the community. The costs associated with these projects are expensed in the period incurred but is accounted for on the accrual basis for projects not completed within the fiscal year. Improvements are itemized separately and by project for clarity. h. Impairment of assets - An assessment is made at each financial position date to determine whether there is any indication of impairment of any assets, or whether there is any indication that an impairment loss previously recognized on an asset in prior years may no longer exist; the asset’s recoverable amount is estimated. An asset’s recoverable amount is computed as the higher of the asset’s value in use or its net selling price.

An impairment loss is recognized only if the carrying amount of an asset exceeds its recoverable amount. An impairment loss is charged to operations in the period in which it arises unless the asset is carried at a revalued amount in which case the impairment is charged to revaluation.